The role of aspirations in collective action and labor markets

A growing literature in economics seeks to explain why people remain poor. Classical theories explained the persistence of poverty with constraints that are external to an individual such as market imperfections and coordination problems. Recently economists explored the role of aspiration failures as an internal constraint in escaping from poverty. Aspiration failures occur when individuals fail to make investments because of too low or too high aspirations. Aspirations are formed through own experiences, but also by the achievements of individuals one can observe. Individuals living in po...